Pay weekly changed to pay monthly

[MyUserName]

Hello all,

My agent has asked whether I would be happy to switch from having my invoices being paid weekly to having them paid monthly.
Anyone know of any reasons why this might be a bad idea for me?

[TestMangler]

Use your imagination. You are extending them four or five times as much credit as you are currently. Definately a no-no.

[northernladuk]

How can people pass a business test when they can't even work out when the want paying and stand up for it??

[MyUserName]

Yep, sorry if I am slow on the uptake but I am relatively new to all this and will probably ask several more stupid questions. When I started sword fighting I even asked the one about who would win between a knight and a samurai.

My company gets paid every week and I get paid every month from it, plus dividends when I am feeling generous. So although I feel uncomforable with the idea of having my invoices paid monthly rather than weekly I cannot put my finger on why.

Other than losing out on a minute amount of interest, could you put me out of my misery and tell me the glaringly obvious issue I am missing?

[northernladuk]

The agency goes bust or decides not to pay you on the day before they should pay you. Work out how much you stand to lose in each case. You are a business now, start thinking like one.

[MyUserName]

The agency goes bust or decides not to pay you on the day before they should pay you. Work out how much you stand to lose in each case.

Well, yes. That had crossed my mind. I was wondering whether anyone knew of anything more pressing as I assumed that this was unlikely enough to be an edge case.

However, if others are saying that same thing then I guess it is not an edge case after all.

You are a business now, start thinking like one.

Indeed, however running a business is a learned skill and takes time to develop.

Oops - and thanks for the help.

And the other answer was the knight.

[nomadd]

And the other answer was the Knight.

Wrong. The winner was the Archer.

[chef]

Lend me £1000 and I'll pay you back in a week..

this continues a few times with a friend who is notoriously bad with budgeting.

then a few times later the friend says "lend me £1000 and i'll pay you back in a month, dont mind do you?"

wouldn't you question why it isn't like before and pay back in a week? friend says well it's easier for me and you don't mind do you?

you agree, that goes on reguarly and the friend now pays you back a month later.

one day, the day before he said he'd repay you, you bump into the friend on the street, he says

"err that money i owe you, i dont have it, you see i changed bank accounts and.. and... and.., dont worry though it will be all yours next week"

friend then dissappers.. and doesnt answer phone calls, turns out he left his house 2 weeks earlier, no forwarding address, shame you hadn't lent it him on a weekly basis, he might still be around and you could of sorted the problem earlier..

better explained for you?

[chef]

Shorter version:

If the agency are fine with paying you the money because they have it, why would they want to extend the amount of time before they pay you? are they having money issues? have they always paid on time without fail? or just simply want to take advantage of the extra interest gained.

most likely answer from pimp: the client is paying them every 90 days and are bad payers.

"is the agency saying they have financial problems? if the client pays them late and they see the need to extend your terms then that says so to me, why would you ever take worse credit terms with an agency that is in that situation???"


other likely answer: "the client pays us every 30 days therefore we are making our contract with you in line with that"

"surely the agency % on top should have that risk factored in?"
"why should you shoulder all the responsibility of credit? if so then why doesnt the agency take a lower % of the rate and pay you more"

[Scrag Meister]

Hello all,

My agent has asked whether I would be happy to switch from having my invoices being paid weekly to having them paid monthly.
Anyone know of any reasons why this might be a bad idea for me?

If the agent is truly giving you the choice then stick with weekly, it minimises your credit risk to the agency/client.

Weekly payment, max they owe you is 5x day rate,
Monthly it's 20ishx day rate.